Why credit card companies are dangling more rewards in front of people

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Despite some recent backsliding, the total pile of US credit card debt outstanding remains far below its pre-crisis peak. New regulations, changing consumer attitudes toward debt, and more conservative lending during the Great Recession drove the change over the last few years.

But now there are signs credit card companies and banks are again trying to reinvigorate American credit card usage. On average, card companies increased their initial bonus rewards—which include points, miles or cash back offered to new cardholders after purchases—by 5.32% in the second quarter, compared to the first quarter of this year, according to data from CardHub,a credit search and comparison tool.

So are these rewards working? Hard to say. Credit card usage is picking up a bit. But improvement in the US economy, the job market, and consumer attitudes are likely driving that as much as any credit card company’s marketing ploy. And some consumers have likely learned over the years how difficult it can be to actually use the rewards that credit card companies dangle in front of them. Such restrictions are part of the reason that a third of all credit card loyalty awards dispensed each year are never redeemed.